If the present value of the $1,000 to be received in one year is $800,the interest rate is

Name: If the present value of the $1,000 to be received in one year is $800,the interest rate is
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The present value formula is $PV = \frac{FV}{(1 + r)^n}$, where PV is the present value, FV is the future value, r is the interest rate, and n is the number of periods. Here, $800 = \frac{1000}{(1 + r)^1}$. Solving for r gives r = 0.25 or 25 percent per year.

If the Present Value of the $1,000 to Be Received